Defintions
The system of rules, practices and processes by which a firm is directed and controlled.
Corporate Governance
A way of discovering what is the best performance being achieved – whether in a particular company, by a competitor or by an entirely different industry.
benchmark company
A measure of an investment’s rate of return.
Internal Rate of Return
A fixed income instrument that represents a loan made by an investor to a borrower.
operating budget
The annual interest payment that the bondholder receives from the bond's issue date until it matures.
coupon rate
The way a company takes responsibility for its actions and their impact on employees, stakeholders and communities.
Corporate Responsibility
A rating that independent agencies issue to measure the credit quality of a particular bond.
bond rating
One of the financial statements of a company and shows the company’s revenues and expenses during a particular period.
income statement
The value in the present of a sum of money, in contrast to some future value it will have when it has been invested at compound interest.
Net Present Value
A financial term used in reference to bonds and other fixed-interest securities such as gilts
current Yield
Moral principles that govern a person's behavior or the conducting of an activity.
ethics
The difference between the budgeted or baseline amount of expense or revenue, and the actual amount.
Budget Discrepancies
An individual who often works as part of a financial institution and is primarily concerned with raising capital for corporations, governments or other entities
investment banker
A relative magnitude of two selected numerical values taken from an enterprise's financial statements.
financial ratios
The interest a company pays on its borrowings.
cost of debt
A summary of the financial balances of an individual or organization, whether it be a sole proprietorship, a business partnership, a corporation, private limited company or other organization such as Government or not-for-profit entity.
balance sheet
A budget allocating money for the acquisition or maintenance of fixed assets such as land, buildings, and equipment.
capital budget
A bond secured by a mortgage or pool of mortgages.
mortgage bond
Any technique involving the use of debt rather than fresh equity in the purchase of an asset, with the expectation that the after-tax profit to equity holders from the transaction
financial leverage
The return a firm theoretically pays to its equity investors, i.e., shareholders, to compensate for the risk they undertake by investing their capital.
cost of equity
One hundredth of one percent, used chiefly in expressing differences of interest rates
basis point
A financial statement that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period
cash flow statement
The length of time required to recover the cost of an investment.
Payback Method
A sum of money paid regularly (typically quarterly) by a company to its shareholders out of its profits (or reserves).
dividend
Shares entitling their holder to dividends that vary in amount and may even be missed, depending on the fortunes of the company.
common stock